Suddenly things are coming in nines! The last Shop Talk article, published in the March edition of Tech Decisions, was written around answers to nine questions concerning core system implementation. Recently my company received a questionnaire concerning policy administration system selection from a carrier doing its homework. There were nine questions.
They are good questions and should be of general interest so I decided to go with the nines again. So, my thanks to the carrier that submitted these questions (and who will remain anonymous in order to avoid a flood of unsolicited calls from policy admin system vendors).
Increasingly, carriers can find enterprise-wide policy administration system solutions. Traditionally, vendors wrote commercial- or personal-lines specific solutions and built domain and delivery expertise in one area or the other. The more recent vendor arrivals in the market have tended to write software toolkits, which they then use to configure line of business solutions and in doing so have been able to create single-platform solutions for carriers that write in both commercial and personal markets (and workers’ comp also).
Any others? Some vendor policy administration solutions also include imaging and workflow capabilities.
Conversion—big bang, at renewal, other? Very few carriers opt for a “big bang” (i.e. in-force) policy conversion. Most are (wisely) put off by the additional risks posed by such a strategy, although the idea of moving cleanly and quickly from one system to another is initially attractive. Of the few that opt for an in-force conversion most have significant problems balancing financials and avoiding other operational disruptions. We always recommend an at-renewal conversion method, which can be hard enough, and of course extends the overall implementation timeline considerably.
5. Are companies making changes to processes and workflows to conform to the new system?
It is critically important for a carrier to define a set of selection criteria and apply those criteria consistently in comparing and ultimately selecting a vendor. A viable methodology for software selection should start with a series of group conversations with carrier stakeholders that are designed to catalogue, define, and rank those criteria the carrier will use to assess vendors and ultimately choose one. These criteria commonly include such categories as business functionality, support for business drivers, technology, partnership fit, vendor risk profile, price, terms and conditions, and additional services.
Mitigation strategies include:
• Ensuring that an appropriate and well understood vendor solution is selected. The single most effective way to ensure this is to execute a proof-of-concept (POC) as the final selection step. (For more information on execution of a POC please see Shop Talk August 2007 “Unclear on the Concept.”)